Rising commodity prices are offering farmers a brighter revenue outlook for 2026 and ‘27, but escalating input costs continue to tighten margins. University of Illinois agricultural economist Nick Paulson is optimistic for the farm gate.
“Maybe a good news takeaway is on the revenue side, we’re seeing pricing opportunities now for the 2026 crop and looking ahead to 2027 that are higher than what we were looking at in our May release and higher than what we’ve seen since the 2023 crop year, looking at close to a $5 price for 2026 crop and a $5 price on corn for 2027. Beans, at or above $12 per bushel for both ‘26 and ‘27, again considerably higher than what we’ve had in the last three crop years.”
But the negative change is on the production cost side.
“Higher production costs in 2027. A continued increase in those, with the big changes on the on the increase in cost being in the fertilizer and fuel categories, just based on the higher prices we’ve seen for those, which are attributed mainly to impacts of the Iran conflict that started end of February.”
Paulson says there are things that producers can do to lower costs, including trying to maximize profitability rather than maximizing yields.
“There’s typically some room there to lower those application rates. The other thing that we’ve kind of been consistently saying is just make sure that those capital purchases that you make, whether that’s machinery or land, are evaluated correctly. We’ve seen a significant increase in machinery costs in the last three to four years. Carefully making those reinvestment decisions and doing that when it’s needed is another thing that can save a few dollars per acre.”
Paulson adds there have been considerable increases in costs and the investment required to produce corn and soybeans over the past 25 years, yet the average return has not seen the same growth, and there’s no indication that that average is increasing through time.